Tbilisi property sales spike to 3,822 in February while new permits collapse

Tbilisi real estate Georgia: strong sales meet shrinking supply

The Tbilisi real estate Georgia market began 2026 with a clear split: demand is heating up while the pipeline of new supply is shrinking. In February, 3,822 apartments changed hands across the city, according to Galt & Taggart, continuing momentum from the second half of 2025. Prices moved higher at the same time permits for new construction fell sharply.

This is an important moment for buyers, investors and expats watching housing prices and rental returns in Georgia's capital. We lay out the numbers, explain the drivers, and offer practical guidance for different types of market participants.

What the headline numbers tell us

Galt & Taggart's monthly report presents a mixed picture: rising sales and prices on one side, falling construction approvals on the other. Key figures from February and the first two months of 2026:

• Total apartments sold in February: 3,822 units.
• Secondary market sales (Feb): 1,864 units, up 19.2% year-on-year and up 8.6% for the first two months of 2026.
• Primary market sales (Feb): 1,958 units, up 11.2% year-on-year and up 7.8% for 2M26, though registration delays may blunt the official figures.
• Galt & Taggart's real-time developer survey shows a stronger primary market trend with a 26.6% year-on-year increase in February.
• Cumulative primary market growth for the first two months of 2026 is 24.1% year-on-year per developer data.
• Total transactions in 2M26: 6,786, with combined residential market value of USD 595 million, up 16.7% year-on-year.
• Construction permits (Feb): permits for 10 residential projects, totaling 60,283 sq.m, down 44.7% year-on-year and marking the fifth consecutive month of falling permit volumes.
• For 2026 to date, the total living area of issued permits has fallen 50.7% year-on-year.
• Average primary market price (Feb): USD 1,398 per sq.m, up 0.9% month-on-month.
• Average secondary market price (new buildings with permits from 2013 onward): USD 1,304 per sq.m, up 0.6% month-on-month.
• Average monthly rent for a 50–60 sq.m apartment (Feb): USD 10.1 per sq.m, down 1.8% month-on-month, with a rental yield of 8.6%.

These are significant moves in a short period. Sales volumes and transaction value are up, while permit issuance and the forward supply picture point the other way. This split shapes near-term price momentum and medium-term supply risk.

Why sales are up and what is driving demand

Several factors explain stronger sales in Tbilisi early in 2026. Our read of the numbers and market signals highlights the following drivers:

• Recovery from last year's weak base. Analysts point to domestic political instability in 2025 that suppressed transactions. The strong year-on-year growth partly reflects that low base.
• A rebound in buyer confidence. Higher volumes across primary and secondary markets suggest buyers returned once uncertainty eased.
• Developer incentives and promotions. The primary market growth measured by developer surveys is stronger than official registrations, implying active sales and possibly deferred registrations as developers offer staged deals.
• Investment demand for income-producing property. With a reported rental yield of 8.6%, Tbilisi remains attractive for yield-seeking buyers compared with many regional alternatives.

From an investor's perspective, this combination of rising transaction volumes and sustained rental yields is a compelling sign. But there are caveats: some of the growth is statistical recovery rather than fresh secular expansion, and the pace of price gains is modest on a month-to-month basis.

Prices: steady monthly gains but watch the gap between primary and secondary

Prices rose in February on both the primary and the specified segment of the secondary market. The key price metrics show a market that is moving higher but not overheating.

• Primary market average price: USD 1,398 per sq.m, up 0.9% month-on-month.
• Secondary market average price (newer buildings with permits from 2013+): USD 1,304 per sq.m, up 0.6% month-on-month.

Two points stand out:

1. The primary market price edge over newer secondary stock suggests developers are either targeting a higher-spec product or are passing on higher construction and financing costs. For buyers, paying a premium in the primary sector must be balanced against warranty, finishing level and anticipated maintenance costs.

2. Month-on-month movements are small. These are not the double-digit monthly jumps that signal froth. Instead, prices are climbing at a steady clip while transaction volumes increase.

For prospective buyers, that means negotiating power still exists in certain segments, especially for older secondary apartments or off-plan projects where delivery timing is uncertain.

Supply contraction: permits fall and why that matters

The most striking supply-side development is the collapse in permit issuance. February data showed permits for 10 residential projects at 60,283 sq.m, down 44.7% year-on-year. More broadly, the total living area of permits for 2026 is down 50.7%.

This is the fifth consecutive month of contraction in permit volumes. The reasons are worth noting:

• Developers may be delaying new launches after the uncertainty of 2025.
• Rising costs of materials, labor or financing can make new projects less attractive at current price levels.
• Municipal or regulatory changes can slow approvals.

Why this matters to buyers and investors:

• Reduced permit flows mean lower forward supply. If demand remains elevated, prices could get stronger once the existing pipeline is absorbed.
• For investors focused on rental income, slower new supply reduces the risk of short-term oversupply in quality segments.
• For buyers who need a new home, shrinking permit numbers could limit choice and push them toward secondary-market stock.

But supply contraction is not a guarantee of strong price growth. If affordability becomes a constraint, demand could cool even with fewer new projects.

Rental market: stable yields but small softening in rents

The rental market in February showed minor softening but retained a strong yield profile:

• Average rent for 50–60 sq.m: USD 10.1 per sq.m per month, down 1.8% month-on-month.
• Reported rental yield: 8.6%.

An 8.6% gross yield is high by international standards and keeps investor interest alive. Yet the slight month-on-month rental decline signals localized pressure, perhaps from seasonal factors or higher vacancy in specific submarkets.

For landlords and buy-to-let investors, the takeaway is clear:

• Rental income remains attractive relative to acquisition prices, but focus on tenant quality and running costs is essential.
• Short-term rental strategies tied to tourism should be tested against occupancy trends and regulatory rules.

Who benefits, who risks losing out

Winners and losers in the current phase of the Tbilisi market are not evenly distributed.